“Yes, one day the Dow will reach 36,000 and Jim Glassman will be right…one day the sun will burn out too, but the question is when?”
Anonymous

The real question is not really “when” however. The question is: What are you going to do today in the here and now with today’s market price? Predicting a price target requires a crystal ball — a tool that doesn’t exist.

Kathryn Welling brings the great question forward:

“What struck me even at the time was that here were these supposedly very bright guys who insisted on applying a theory to the markets despite plentiful evidence that what the theory said couldn’t happen in fact doesoccur with staggering regularity in the markets. Big fat tails swat investors in the fanny with fair frequency. So-called ’six sigma events’ aren’t really terribly rare, no matter what the equations tell you.”
Kathryn M. Welling, Weeden & Co.

Woody Dorsey responds:

“Absolutely. What I wrote about in the book is that it is like the invisible hand comes along once in a while to spank the markets. The inference is that boy, you really should be on your guard because you know these events are going to happen. And when they do, those big fat tails provide the biggest and best opportunities to safely build capital; that’s when you take advantage of market opportunities. That’s the lesson. Yet [efficient market theorist and University of Chicago Professor] Eugene Fama himself says that the 1987 crash was an aberration–as was 1929. Insists they really didn’t matter. But they mattered to a lot of people.”
Woody Dorsey, Market Semiotics

“Most things in life are not like steam engines, but people treat them as if they were. Life in general, and markets in particular, involve large random factors, have complicated stochastic structures, and regularly spring nasty surprises. Their behaviour over short timespans may have so little significance as to be nothing but noise. Extrapolation is impossible or meaningless. Yet try as we might, we continue to see patterns where none exist, misunderstand the role of randomness, seek explanations for chance phenomena, and believe that we know more about the future than we do.”
Mark Wainwright
Plus Magazine

In a recent paper Nassim Nicholas Taleb outlined:

“In some strategies and life situations, it is said, one gambles dollars to win a succession of pennies. In others one risks a succession of pennies to win dollars. While one would think that the second category would be more appealing to investors and economic agents, we have an overwhelming evidence of the popularity of the first. A popular illustration of such asymmetry in returns is evident in the story of the Long Term Capital Management hedge fund. The fund derived steady returns over a dozen quarters then lost all of them in addition to almost all its capital in a single observation - only for the main principals to restart a new, albeit milder, version of the strategy. Is there a systematic bias in favor of such return profiles?”
Nassim Nicholas Taleb

Do only sellers benefit from exchange?